Southwest Airlines Rapid Rewards Premier Card – Higher Bonus!

Please note that I will always try to post the best sign-up bonus, but you should also do your own research!

Card:  Chase Southwest Airlines Rapid Rewards Premier

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Normally, this card rewards you with 25,000 miles after spending $1,000 in 90 days; however, for a limited time, the bonus is doubled, in both spending requirement ($2,000) and points earned (50,000). To me, this card is a no-brainer (and will likely be my next card), as Southwest has a fairly substantial footprint in the lower 48 and an increasing presence in Central America and the Caribbean. After the 90 days, you should have at least 52,000 points (50,000 bonus + at least 2,000 points [1 points for every dollar]).

Note:  This card has a $99 annual fee, which is partially off-set by the bonus points on your cardmember anniversary.

What other benefits does thes card get you? Take a look:

  • 2 points per dollar spent at Southwest, 1 point per dollar everywhere else
  • 6,000 points on your cardmember anniversary/when you pay the annual fee
  • No foreign transaction fees

So, where can Southwest take you? And how many trips are you likely to get out of this bonus? Well using my home city as a template, let’s look at Laguardia here in New York.

First off, I’ve really always wanted to go to Austin, so I’ve been looking into going over Columbus weekend. On Southwest, I can fly out to Austin and back for $421.34, or use 24,493 points. And, if I’m feeling generous, I can take Nick with me. 😉

If I decide to go it alone, I can also jet off to to Chicago, which Southwest flies to non-stop from Laguardia. That long-weekend trip in August is either $297.96 or 17,566 points–I think I’ll use the points!

With both scenarios (two trips alone or one trip to Austin together), I’ve only used 42,059 or 48,986 of the 52,000+ points I could potentially earn with this card. Your mileage may vary, as Rapid Rewards points are linked to the dollar value of the ticket. That can either be really good or really bad, so make sure to do your research.

To find out if this might be good card for you, head over to the Southwest route map and check out where they fly from your local airport.

 

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Which Card for Katherine?

Recently, my friend Katherine asked me what cash back card would be best for her if most of her spending is at restaurants. Currently, Katherine has the Chase Freedom, which gets 1% cash back at restaurants for 9 months in 2016, and 5% cash back for the remaining three months. If we assume that she spends $300 a month, we can guess that with her Chase Freedom, she’ll earn the following:

($300 x 9 x .01) + ($300 x 3 x 0.05) = $27.00 + $45.00 = $72.00 cash back by using her current credit card.

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Chase Freedom 2016 Cash Back Calendar

Using that as a baseline, what other cards might she be interested in? Well, her options include:

Again, we’ll assume Katherine spends $300 a month on dining, which would earn the following for each card:

  • American Express Blue Cash Everyday – $36.00
  • BankAmericard Cash Rewards – $36.00
  • BarclayCard CashForward – $54.00
  • Citi DoubleCash – $72.00
  • Discover it – $144.00 the first year, $72.00 every year after that
  • TD Bank Cash – $72.00

Clearly, we have some winners and some losers. The big winner, of course, is the Discover it card, which will net Katherine a whopping $144.00 the first year. After that, she’ll earn $72.00 every following year.

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Discover it doubles all the cash back you earn in the first year

Our middle of the road cards are the Citi DoubleCash and the TD Bank Cash, which would earn her $72.00 a year, which is on par with the it card after year one.

Finally our losers:  the American Express Blue Cash Everyday, the BankAmericard Cash Rewards, and the BarclayCard CashForward, which would earn her $36.00-$54.00. Hard pass.

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So there you have it, Katherine! Go for the Discover it, and you’ll be on your way to taking me out for a nice dinner (for the cash back, of course 😉 )!

Saturday Round-Up 2/27

Saturday, a day to rest and catch up on anything you might have missed!

Posts:

News:

  • Alaska Airlines credit card bonus is increasing from 25,000 to 30,000 miles in May 2016 – from Doctor of Credit. Unfortunately, you’ll have to spend $1,000 in 90 days to get the 30,000 mile bonus, where as now you get the 25,000 by simply being approved.
  • New Restrictions for Amex Business Card Sign-Up Bonuses – from One Mile at a Time. Seems like AMEX is making the Business Cards follow the same “once per lifetime” rule as their personal cards.

Bonuses:

The Life-Changing Magic of Recurring Payments

If Marie Kondo can have The Life-Changing Magic of Tidying Up, I can have The Life-Changing Magic of Recurring Payments. Wait, what?

We use our credit cards every day for, well, every day purchases. But what about those things that only come around once a month or once and a while? Those things are really helpful to building a larger points balance, getting you closer to your goal.

Recurring payments are a great way to meet the minimum spend on new credit cards (getting you closer to that bonus) and an easy way to mindlessly accrue points.

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Let’s use for an example my Amtrak Guest Rewards World card. This card allows me to go home to visit my family a few times a year (Hi Mom!). Generally, it costs about 2,500 Amtrak points for an advanced purchase (read:  purchased 3+ months out) one way ticket between New York and Boston. And let’s be totally honest, Amtrak is an awesome (and generally inexpensive) way to get between the two cities. I have all my recurring payments set up on this card, which looks something like:

Recurring Payments Amount
Cable Bill ~$115
Gym Membership $50
Charitable Donation $20
Spotify $10
WNYC $5

Without breaking a sweat, I’m earning about 200 points a month in purchases I was going to make anyway, so it makes sense to consolidate them onto one card. And in the first three months, I’ve spent $600 of the $1,000 needed to get the 20,000 bonus points.

While this might not seem like a ton of points per month, it basically nets me half of a free trip home every year! And that, my friends, is the Life-Changing Magic of Recurring Payments.

Getting Started

So, time and time again, I’ve heard how daunting the idea of opening a bunch of credit card accounts is. I get it! We’ve been conditioned to think that credit cards = bad because they lead to overspending and paying interest. Well, duh! Part of being a responsible adult is managing your money–if you can’t do that, this game isn’t for you. But like most things in life, slow and steady wins the race. So let’s start with your first card!

So how do you pick a card? Well you need to ask yourself a few questions:

  1. What is my goal? If your goal is to earn cash back, look into cards that give a good return. If you want to take a few domestic flights, look into an airline that flies to your local airport.
  2. Do I want fixed points or convertible points? Fixed points are like Delta SkyMiles or Hilton HHonors:  they can’t be changed into other things. Convertible points, like American Express Membership Rewards points, can transfer into other programs, such as Delta or Hilton.
  3. How much can I comfortably spend a month? If it’s $500, don’t get a card that requires $1,000+ in monthly spending.
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Going to Paris in April–that’s a goal!

To stress point one, you should always, always, ALWAYS have a goal! Even if that goal is as vague as earning cash back or taking a trip to Europe next summer.

Let’s pose a couple examples. First, let’s say you live in Washington, D.C., and want to fly domestically. You have two good options:  American Airlines out of National Airport-DCA or United Airlines out of Dulles Airport-IAD. If you prefer American, go with any one of the three Citi American AAdvantage cards (Gold, Platinum, or Executive); however, if you’re more of a United fan, choose the Chase United Explorer MileagePlus card. Note:  this is not the best deal on the United card; wait until the 50,000 miles for $2,000 spend to come back!

In our second example, let’s say you really just want cash back. If you buy a lot of groceries, maybe check out the American Express Blue Cash Preferred, with 6% back at grocery stores, 3% at gas stations and department stores, and 1% everywhere else. Or maybe you like rotating categories like Amazon, restaurants, or gas. In that case, The Chase Freedom or the Discover It with 5% in rotating categories and 1% on everything else is more your speed.

One thing I would note is that you’re always earning rewards with credit cards, whether that points, miles, or cash back. This isn’t the case with your debit card! Banish your debit card, and only use it when you need to. Plus, debit cards have far inferior protections when it comes to fraud.

So there you have it–it’s that easy 😉

Citi Hilton HHonors – Updated Bonus!

First increased bonus post for the blog! Please note that I will always try to post the best sign-up bonus, but you should also do your research!

Card:  Citi Hilton HHonors Visa Signature Card

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Normally, this card rewards you with 40,000 points after spending $1,000 in 120 days; however, the current bonus is almost double that!  Currently, and for an unknown length of time, the bonus is 75,000 points after spending $2,000 in 90 days. After 90 days, you should have 79,000 points at minimum (75,000 bonus + at least 4,000 points [2 points for every dollar])

In addition, this card earns the following number of points:

  • 6 points per dollar spent at Hilton
  • 3 points per dollar spent at gas stations, drugstores, and supermarkets
  • 2 points per dollar everywhere else

Other card benefits:

  • Hilton HHonors Silver Status
  • Fast track to HHonors Gold status after four stays within your first 90 days of account opening or when you make $20,000 or more in purchases each calendar year
  • Earn an annual loyalty bonus of 10,000 Hilton HHonors Bonus Points at the end of each calendar year in which you spend $1,000 or more on stays within the Hilton Portfolio
  • $0 annual fee

A $0 annual fee card is a great card to have in your arsenal, as you can keep it open forever, helping to increase your credit score by upping your average age of accounts.

So this is all great, but what does 79,000 points get you?

  • 10 nights at a Category 1 property
  • 6 nights at a Category 2 property
  • 3 nights at a Category 3 property
  • 2 nights at a Category 4 or 5 property
  • 1 night at a Category 6 property

OK, but what does that mean? Well…good Hilton properties generally start at Category 4 or 5. But on the off-chance you’re headed to Krakow, Poland–you’re all set for 10 days of fun. Hilton sometimes also allows you to book with points and cash. We’re doing a little of both on our Hawaii trip.

One of the best resources for finding hotels is Award Mapper. This tool lets you choose the chain of hotel you want to look, the location, and how many points per night. This is how we located Hilton properties on both Oahu and the Big Island.

Let me know if you have any questions!

What’s the Catch?

Before we get started diving into the wonderful world of traveling thanks to credit cards and their many perks, you should understand that like in life, there is no such thing as a free lunch.

First, you should know your credit score! It amazes me how many people don’t know their credit score–this three digit number is literally your key to everything finance related in life! Many credit card companies provide your FICO score to you for free, as well as services such as Credit Karma and Credit Sesame. You should not jump into this game if your score is lower than 700-720. If it’s lower than that, take the time to build it with one credit card.

To expand a little on this point, applying for new lines of credit will slightly lower your credit score; however, by paying your bills on time and managing your lines of credit judiciously, your score will eventually be higher than when you started!

Second, and this is a nonnegotiable, ALWAYS pay your statement balance in full every month on ALL your cards. Paying interest negates any of the benefits you’re getting from these cards.

Third, slow and steady wins the race! Know how much organic spend (e.g. everyday bills and expenses) you can realistically put on credit cards every month. Buying things to reach credit card spend is a terrible idea! Truly awful! If your monthly expenses are only $500-$600 a month, maybe a credit card that requires you to spend $4,000 in three months isn’t the right card for you. Additionally, don’t apply for so many cards at once that meeting all of those minimum spends will be impossible.

Following these rules, managing multiple credit cards is a lot less difficult than it seems.